Activision-Blizzard Q2 2017 financials: Destiny 2 outperforms Destiny, WoW ‘time spent’ improves over 2016

We could practically copypasta last quarter’s Activision-Blizzard report to this one and nobody would notice. That’s because once again, it’s the Blizzard segment of the company driving the revenue flow; Blizz’s incomes rose 4% year-over-year to account for 42% of the revenue (with King and Activision itself trailing behind).

“Blizzard had the biggest quarterly online player community in its history with a record 46 million MAUsB, up 38% year-over-year. The Overwatch community continued to grow more than a year after launch, setting another all-time MAUB record with the release of two seasonal events in the quarter. Hearthstone MAUsB grew year-over-year and quarter-over-quarter to an all-time record, driven by its expansion, Journey to Un’Goro.”

Blizz is also talking up its “time spent” metric and claiming that it’s increased in World of Warcraft year-over-year, which should shock absolutely no one given Legion:

“Blizzard had Q2-record time spent. In April, Blizzard launched Uprising, an Overwatch seasonal event that included a player-versus-environment mode that drew record play time. Overwatch’s Anniversary event in May and June also drove strong engagement with record participation in customization items. Time spent in World of Warcraft grew year-over-year in the second quarter, and the Legion™ expansion continued to perform ahead of the prior expansion.”

As for Destiny,

“The Destiny 2 console Beta had more total players than the 2014 Destiny Beta, and Destiny 2 pre-orders are now above the first Destiny.”

As always, we note that “MAUsB” and “MAUs” are Monthly Active Users, “the number of individuals who played a particular game in a given month” calculated by “adding the total number of MAUs in each of the months in a given period and dividing that total by the number of months in the period” such that “an individual who plays two of our games would be counted as two users” and “an individual who plays the same game on two platforms or devices in the relevant period would generally be counted as a single user.” This is Blizzard’s preferred method of describing “deep engagement” since it stopped reporting WoW sub numbers a year and change ago.

Source: ActiBlizz investor relations, press release
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23 Comments on "Activision-Blizzard Q2 2017 financials: Destiny 2 outperforms Destiny, WoW ‘time spent’ improves over 2016"

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mike foster

This is SUPER fucking interesting and a good example of how “users” and “actives” are very different numbers. Blizzard has 46 million MAU across all Blizz games (SC, WoW, OW, HS, Diablo, HotS) but claims 70 million HS players and 30 million OW players — that’s like 60+ million “users” who AREN’T playing each month.

Maybe the most staggering number is in the actual report: Activion claims 407 MILLION ACTIVE MONTHLY PLAYERS across all of its games. That’s effing massive.

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Sally Bowls

The number for me was from last quarter: last year people spent 43 billion hours playing/watching their games.

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Jeremiah Wagner

Yeah i dont trust these missleading numbers at all. Its safe to say WoWs truely active players base is around 20% of what it was in its prime.

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Armsbend

There is inherently nothing misleading about a balance sheet on a publicly traded company.

Coolit
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Coolit

I miss them reporting WoW sub numbers which was far more interesting to read and gave a good estimation on how well the game was doing but instead we get a marketing exercise.

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Sally Bowls

Except even when Bliz was announcing subs, they had a quarter where the subs declined and the revenue went up. Now some epeen measurers here look at subs, but the health of a game is determined by its revenue. So we get the best insight into how a game is doing by what NCSoft gives us for non-Wildstar – the revenue per game,

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Armsbend

Balance sheets are not marketing. MOP is publishing the article as a marketing exercise. Blame them.

possum440 .
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possum440 .

It isn’t shocking at all. The same hidden word smithing to fudge numbers. The formula is simple, how many unique active players log in each month onto their battlenet account? Not each game. One person logging in that month, one time, should remove them from the count of all other games, since they have multiple games but one account.

A person that logs in more than one blizzard game should not be counted toward the over total for that month. Numbers blown out of proportion, Blizzards bread and butter.

Blizzard uses one service, battlenet. They may have a few games but only one service. Stating a person logging into each game counts as a user is fully bullshit. A player cannot play both at the same time and logging into the service is the gateway. If each game had its own gateway and Blizzard broke down each game by each unique user per monthly sign in it would be correct. And the numbers would be far lower.

Instead blizzard thinks it can use a single person that logs into battlenet and then over the course of a month plays 4 different games and they can count that person as 4 different people, totally wrong. It is the exact same thing as counting that one user 4 times for simply logging in 4 times and calling them 4 different users, which they do right now.

I bet those whitepaper stock meetings are just a hoot.

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Sally Bowls

The conference call happened. The questions were on OWL, CoD, advertising in mobile games, Blizzard, & Crash.

The speculation points are:
what will be the outcome of ” we’re committed to incubating new initiatives and we’re also thinking about different platforms, especially mobile.” and “multiple dedicated incubation teams that are being led by some of our most experienced game designers at Blizzard.”

and what is the meaning of “no announcements today, but there’s just a beloved IP out there that our communities love to engage in, and it’s worth a further step back, which is we are really in a transition – a tailwind, strong transition to game to the service model”

Thanks for taking my question. Could you talk at a high level how Blizzard is allocating its time and resources right now? What percent of man-hours are spent on new IP versus existing IP? And I guess I’d be curious to hear you talk about how you think about Blizzard’s new IP pipeline the next three to five years. Thanks.

Michael Morhaime – Activision Blizzard, Inc.

Hi, Brian. Thanks. This is Mike. First and foremost, I’d just say that the bulk of our focus continues to be supporting our existing players and releasing high-quality content for our existing games. This quarter is a great example of that approach. We delivered a consistent flow of updates and new content across all of our games, and that has driven record engagement even without a new game launch. We’re also really excited about the future. In addition to supporting all of our live games, we’re committed to incubating new initiatives and we’re also thinking about different platforms, especially mobile.

In terms of new IP, our pipeline is in a better position than ever before in our history. Last year, Allen Adham, who cofounded Blizzard with me and Frank Pearce, returned to the company to take on the task of coordinating our efforts in this regard. And this includes some great ideas that we’d already started to explore. So we now have multiple dedicated incubation teams that are being led by some of our most experienced game designers at Blizzard.

I should say that creating new Blizzard-quality games on any platform will take time. And as we’ve shown in the past, we’re not going to release any games that we don’t feel live up to our expectations or those of our players. When we do bring new experiences to current or new platforms for new and existing IPs, there’re going to be ideas that our teams are passionate about and that we think there’s a large audience for.

Great. Thanks for taking the call, and congrats on the success of Crash. I’m wondering what do you see as the long-term opportunity in remastered nostalgic titles. And do you see opportunities within your own portfolio of owned IP? Thanks.

….

Collister Johnson – Activision Blizzard, Inc.

I’ll jump in just for a second. Ray, it’s Coddy. Echo Eric’s points, but even more broadly across the company, in looking ahead, Spence already shared the Blizzard plans to release a remastered version of StarCraft in Q3. We wind up additional releases of that kind of beloved fan favorite content going forward. Eric said, no announcements today, but there’s just a beloved IP out there that our communities love to engage in, and it’s worth a further step back, which is we are really in a transition – a tailwind, strong transition to game to the service model where we have these passionate and deeply engaged, digitally connected communities to which we can provide an ongoing stream of services, features, events, content. And it is a really strong model, both for our fans and our players and their communities, and a chance to really connect online with each other, but also for the company as a business.

And you can expect us to continue to pursue this, to look for additional ways to engage our digitally connected audiences, hundreds of millions of fans and players both on our large franchises which we’re doing and Eric mentioned as well as in our most popular nostalgic intellectual properties and also new opportunities. And that’s powerful combination between the digitally connected audience that very few engage and our ability to have inspired teams deliver content to them is it’s a strong model and I think we’re still in the early days of exploring it. And I think you’ll see us continue to pursue that in the calls to come.

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Armsbend

Blizzard will not be driving revenue in the Fall when COD and Destiny are released.

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Sally Bowls

I actually wonder if this is actually good “earnings management” as they say. Destiny is Q3, annual CoD in Q4, the wow tentacle sex expansion in Q1. Nice steady flow of megahits, but no two in the same earnings quarter to cause annoying peaks and valleys.

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Armsbend

In gaming they may the only steady earner. Perhaps EA with their staggered sports titles. Tencent because they have a piece of everything.

oldandgrumpy
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oldandgrumpy

It’s interesting to watch how this time spent metric is changing game design, not for the better in my opinion.

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Dobablo

It is subscriptions that ruin MMOs because they create busywork to keep people online to justify the sub.
Cash shops ruin MMOs by locking fun behind grind so there is an incentive to buy the shortcuts.
B2P ruins games by cutting content into small consumable chapters for purchase and incentivising new ideas instead of perfecting current ones.
In short, all commercial games are rubbish and we should only play games published for free.

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Sally Bowls

Perhaps it is not just games. Websites, search engines, and such like, especially ad-supported, are all about measuring eyeballs and time. So I guess it makes sense to speak to investors the same language. But it does make me cynically suspicious when I am forced to grind.

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Armsbend

For every second you are playing my thing you are not playing my competitors thing.

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mike foster

Also in the modern market you’re not competing with just other games. World of Warcraft competes with MMOs, sure, but it’s also competing with Netflix, movies, and any other way people spend their time. Time spent in game is a good way to show how people are allocating their spare time, which includes basically anything a person does outside of working and sleeping.

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Greaterdivinity

Time spent in World of Warcraft grew year-over-year in the second quarter, and the Legion™ expansion continued to perform ahead of the prior expansion.”

I should hope so, given that this was the same quarter that was the tail-end of WoD last year. That’s not a terribly impressive stat for WoW though. And outperforming the second quarter of WoD is similarly a pretty low bar to set…

No surprise that Destiny 2 is doing better than Destiny, between a much higher install base for current-gen consoles and the fact that it’s like, a sequel to a game that ended up being quite successful, I’d hope that their outpacing their beta/preorder numbers from the first game >.>

Hearthstones success still baffles me, but hey, folks are enjoying themselves. Though poor HotS, the only mention I see in the release is in their boilerplate : (

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Slaasher

I kind of disagree with you on how impressive it is/ isnt. WOW is 13 years old now. Any upward sales at this point is a little bit shocking in my opinion.

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Greaterdivinity

It’s not really shocking when you compare the two quarters after an expansion launch, especially a well received expansion, vs. two quarters nearing the end of a deeply unpopular expansion that had received very little post-launch support.

That’s pretty regular player behavior, and you can see it in just about any game that continues to put out content, especially big release. Spikes of player activity following updates compared to declines while the game isn’t being actively supported.

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Jack Kerras

I also feel like Destiny’s willingness to support and improve its game over the course of time is a big chunk of that; a lot of folks figured ‘Aw, they just put the thing out and now it’s gonna be like this forever’, but the changes have been -really- substantial.

No one could look at vanilla Destiny and endgame post-RoI Destiny and think that it was phoned in, even if launch-week Destiny’s content was well below what most folks expected in terms of variety.

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Greaterdivinity

Absolutely. It was rough at the start, but Bungie/Activision were making a longterm investment with the franchise and it showed with how much effort went into improving the game after it launched. I was pretty down on the game at launch, but super pleased to see how good of a job Bungie did supporting it post-launch. Not everyone loved the changes, but they generally seemed well received.

I know I’m definitely looking forward to the sequel now that it’s coming to PC. If nothing else, we can be confident that it will see a ton of post-launch support in the form of both free updates and paid DLC, which I’m pretty alright with.

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Jack Kerras

I am trying desperately not to buy it for PS4, perfect my Destiny 2 leveling mojo and get some best-practices built into my skull, and then burn through fast on PC as soon as I’m there. ^_^; It wouldn’t be thaaaaaaaaat expensive from a dollars-per-hour standpoint, considering I spent so much time with Destiny…

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